The advent of transgenic technology, in which foreign genetic information is stably introduced into the mammalian germ line, has provided a powerful approach to the study of gene function and regulation. We are continuing to use this technology to investigate several important aspects of cancer pathogenesis: the role of growth factors, receptors and oncogenes in the initiation and development of neoplasia, and the ability of malignantly transformed cells to evade destruction by chemotherapeutic agents. Transforming growth factor alpha (TGFalpha) and epidermal growth factor (EGF) stimulate cellular proliferation by binding and activating the EGF receptor tyrosine kinase. Perturbation of this signal transduction pathway can transform cells in culture, and has been implicated in the development of human cancer. To examine this hypothesis in vivo, transgenic mice were made bearing either the human TGFalpha or EGF receptor gene. TGFalpha overexpression induces hepatocellular carcinoma, mammary adenocarcinoma, pancreatic metaplasia and fibrosis, and gastric cystic hyperplasia. Furthermore, analysis of these transgenic mice has led to new discoveries about normal development of the breast and testis. Transgenic mice made using an activated form of a related gene, int-3, which contains EGF repeats and is a member of the Notch gene family, developed hyperplasia of secretory epithelia and neoplasia of the salivary and mammary glands. In addition, male mice were sterile and female mice could not lactate. The human MDRI gene encodes a multidrug transporter capable of conferring multidrug resistance to malignant cells. Bone marrow suppression is a major impediment to the use of chemotherapy in cancer treatment. Transgenic mice have been made that express the MDR1 gene in the normally drug-sensitive bone marrow. The transgenic marrow becomes resistant to the cytotoxic effects of a number of commonly used chemotherapeutic drugs. These transgenic mice have been used as a model to test the efficacy of new chemotherapeutic agents, including reversing agents that can sensitize malignant cells and cure previously unresponsive cancers.